Minority shareholder oppression on steroids is one way to describe what happened in Matter of Twin Bay Village, Inc., in which an upstate appellate panel recently affirmed an order dissolving the corporation and setting aside a stock issuance that diluted the minority shareholders. Learn more in this week’s New York Business Divorce.
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Agreements providing for compulsory buyouts upon termination of a minority shareholder’s employment can be a good thing. Complications or sometimes litigation sets in, however, when termination for cause is linked to a devalued buyout formula, as illustrated in the case highlighted in this week’s New York Business Divorce.
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There’s sure to be fireworks — or at least litigation — when one of two 50% members of an LLC attempts to terminate the other for wrongful conduct as vaguely defined in the LLC agreement, as illustrated in an appellate ruling last month in Harker v. Guyther, featured in this week’s New York Business Divorce.
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An unusual set of facts, involving the termination of a shareholder’s employment following his criminal conviction, set the stage for last week’s appellate ruling requiring the redemption of his shares notwithstanding the company’s noncompliance with certain time limitations governing the exercise of its purchase option. Get the full story in this week’s New York Business Divorce.
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If you’re going to require super-majority consent as to certain business decisions in a shareholder or operating agreement, be sure to draft clearly so as to leave no room for potential litigation over the level of required consent. That’s the lesson of Herbert v Schodack Exit Ten, LLC, decided earlier this month by an upstate appellate panel and highlighted in this week’s New York Business Divorce.
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“Is she or isn’t she a shareholder? Only her tax preparer knows for sure.” It may not be quite as catchy as the famous Clairol commercial, but it’s a good entreaty to read this week’s New York Business Divorce highlighting a recent appellate ruling in a dissolution case in which the petitioner unsuccessfully relied on tax returns to prove his shareholder status.
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Last week the Appellate Division, Third Department, handed down its second ruling in four months in cases involving dueling dissolution petitions. Its latest decision, in Matter of Clever Innovations, Inc., affirms the denial of a deadlock petition and the grant of a compulsory buy-out based on an oppressed shareholder petition. It’s in this week’s New York Business Divorce.

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